China's soybean imports are likely to slow in the coming months because of weak animal feed demand and negative crushing margins, leaving little room for US cargoes, The Poultry Site reports, citing Reuters. Soybeans, China's biggest US farm import, were left off the list of US farm products on which China is set to cut tariffs after last week's summit between Presidents Xi Jinping and Donald Trump.
Private oilseed processors have covered most of their needs until the Lunar New Year in early February with beans from Brazil, Argentina and state reserves. "We have booked for all of October and much of November shipments from Brazil and Argentina," a senior executive at a Chinese crusher said, adding that further purchases would incur losses.
Chinese state companies have bought about 13.7 million tonnes of US soybeans since a trade deal in May, according to three Asia-based traders, but private crushers have taken only South American shipments. US beans still carry an extra 10% tariff dating from the start of the trade war, which makes them uneconomical for commercial buyers.
Brazilian soybeans were quoted at par with US cargoes, before tariffs, at about $590 a tonne including cost and freight, and are favoured for their higher oil content. Crushing margins for November-shipment US beans are 120 to 200 yuan a tonne in the red and about minus 120 yuan for Brazilian beans, said Rosa Wang of Shanghai JC Intelligence. Shrinking hog herds add to the soft feed outlook, and Chicago soybean futures fell 1.5% this week as the US harvest builds. The report is by Melanie Epp.
Photo: United Soybean Board / Wikimedia Commons (CC BY 2.0)
Source: The Poultry Site
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